Microsoft Open Licensing Tips

Last week, Microsoft announced changes to its Open
Licensing programs, designed for small and medium-sized businesses. According
to the company, the programs will be simplified and combined with some interesting
financial offerings; however, details have not yet been released. Even so, it's
a good time to review Open Licensing -– one of the best deals available
to most businesses who use Microsoft licensing, but widely misunderstood as
many customers are not even aware of the program and the benefits. Below is
my take on what Open License can offer as well as pitfalls to watch out for.

Open Basics
Open is Microsoft’s licensing program for business with less than 250
PCs -- and as few as one.

Open pricing is available for organizations including corporate, government,
charity and education. It’s available through resellers worldwide; whatever
reseller you prefer to use, they are probably able to handle Open Licensing
for you. If not, it’s an easy matter for your VAR of choice to sign up
with Microsoft.

Based on a minimum initial order of any five licenses, Open is the most accessible
licensing program to small businesses. Once the initial purchase has been made,
you are eligible for Open pricing for two years, with a minimum re-order of
only one license. While not a huge break in pricing from shrink-wrap purchases,
it does provide companies with an easier way to maintain compliance, as opposed
to filing individual paper licenses from full-packaged product (FPP) boxes.

Another advantage of Open over traditional shrink-wrap boxes is that you can
purchase Software Assurance (SA) via Open. SA coverage is priced for a two-year
period, and ends with the Open Business agreement, no matter when in the term
the SA has been purchased.

Open Licenses are only available for purchase for the current version of each
product. Under the terms of the Open agreement, however, you are entitled to
backwards license to any previous version of the product, while still retaining
legal rights to the version purchased when your organization is ready to move
to that version. Older versions of the software media are available for purchase
for this purpose.

This differs from the rights granted with a license purchased pre-loaded through
the OEM (Original Equipment Manufacturer) channel or as FPP, which are typically
not granted backwards license rights. Open Licenses are also eligible to be
transferred to another machine when the original machine has been retired or
moved within the organization. OEM products are not granted transfer rights,
but are tied to the machine they were originally loaded on.

Managing Open Licenses
Each Open Business agreement is assigned an authorization number, which must
be referenced on each order placed under the agreement. Licenses are tracked
electronically through a password-protected Web site, the eOpen site. The authorization
number and initial license number are provided after the initial order through
e-mail to the end-user referenced on the purchase order. In order to access
the eOpen site, both the authorization number and license number are required,
as well as a Microsoft Passport login.

This is one of the potential pitfalls of the Open License program: There are hundreds
of resellers and distributors that are authorized to sell Open Licenses. If they
are not used to tracking licenses, and you do not provide your authorization number
with each purchase order, you can end up with dozens of Open License agreements.

If you have multiple purchasing agents, or a change in personnel that causes
you to lose the authorization and license numbers, you can lose access to the
eOpen site, and therefore your proof of purchase for the licenses in case of
an audit.

Another potential pitfall of the eOpen site is that many organizations choose
to start a new Open Business agreement when they are making a new purchase of
SA in order to receive the full two-year coverage of the
SA (remember, it expires with the Open agreement no matter when in the agreement
the SA was purchased -- no prorating), usually a good business decision, This,
however, will result in multiple authorization numbers as well as multiple license
numbers. You'll need to put a system in place to track and maintain these numbers
or all proof of purchase can easily be lost.

SA, while initially designed as a vehicle for upgrades (and, of course, to
provide Microsoft with an annualized revenue stream), has become a sort of reward
system for customers who purchase stay current on the Microsoft product line.
Additional SA “benefits” are provided by Microsoft on a value scale
that increases with the size of commitment to SA – Open Business being
the low man on the totem pole. That said, you do still get some perks that can
be useful. For purchases of desktop software (desktop applications such as the
Office suites, Visio, Project, FrontPage), you can receive rights to the
Home Use Program. For Desktop and Server purchases (Windows Server OS, plus
all applications that run at the server level such as Exchange, SQL, BizTalk,
Project Server), you can receive eLearning benefits. For Server-only purchases
you can receive TechNet Online Concierge Chat subscriptions.

Media must be purchased separately for Open Business agreements. Each Open
Business agreement is provided a Volume License Key for each product purchased
(i.e., Office Applications, Windows Servers, Windows Server Applications),
which allows multiple installs from each media kit. Media may not be purchased
for products that haven’t been purchased under an Open Authorization Number.

Today, Open is offered in many different flavors around the world. In the U.S.,
Microsoft offers “Open Value" (with a company-wide option), “Open
Volume” and “Open Business.” Learn more about these here.
But remember to stay tuned for the revamped program, coming in October.

About the Author

Scott Braden has helped more than 600 companies negotiate Microsoft volume
license deals. For a free case study, "How a Mid-size Company Saved over
$870,000 on a $3 million Microsoft Enterprise Agreement, in Less Than Three
Weeks," visit www.MicrosoftCaseStudy.com.